Facebook Is Losing Millions Of Users In The US And Other Mature Markets

Facebook
has lost millions of users per month in its biggest markets,
independent data suggests, as alternative social networks attract
the attention of those looking for fresh online playgrounds.

As Facebook prepares to update investors on its performance in
the first three months of the year, with analysts forecasting
revenues up 36% on last year, studies suggest that its expansion
in the US, UK and other major European countries has peaked.

In the last
month, the world's largest social network has lost 6m US
visitors, a 4% fall, according to analysis firm SocialBakers. In
the UK, 1.4m fewer users checked in last month, a fall of 4.5%.
The declines are sustained. In the last six months, Facebook has
lost nearly 9m monthly visitors in the US and 2m in the
UK.

Users are also switching off in Canada, Spain, France, Germany
and Japan, where Facebook has some of its biggest followings. A
spokeswoman for Facebook declined to comment.

"The problem is that, in the US and UK, most people who want to
sign up for Facebook have already done it," said new media
specialist Ian Maude at Enders Analysis. "There is a boredom
factor where people like to try something new. Is Facebook going
to go the way of Myspace? The risk is relatively small, but that
is not to say it isn't there."

Alternative social networks such as Instagram,
the photo sharing site that won 30m users in 18 months before
Facebook acquired the business a year ago, have seen surges in
popularity with younger age groups.

Path, the mobile phone-based social network founded by former
Facebook employee Dave
Morin, which restricts its users to 150 friends, is gaining
1m users a week and has recently topped 9m, with 500,000
Venezuelans downloading the app in a single weekend.

Facebook is still growing fast in South America: monthly visitors
in Brazil were up 6% in the last month to 70m , according to
SocialBakers, whose information is used by Facebook advertisers,
while India has seen a 4% rise to 64m – still a fraction of the
country's population, leaving room for further growth.

But in developed markets, other Facebook trackers are reporting
declines. Analysts at Jefferies bank have developed an algorithm
that interfaces directly with Facebook software and it "suggests
user levels in [the first quarter] may have declined from peak",
according to a recent note.

Jefferies saw global numbers peak at 1.05bn a month in January,
before falling by 20m in February. Numbers rose again in April.
The network has now lost nearly 2m visitors in the UK since
December, according to research firm Nielsen, with its 27m total
flat on a year ago.

The number of minutes Americans spend on Facebook appears to be
falling, too. The average was 121 minutes in December 2012, but
that fell to 115 minutes in February, according to comScore.

As Facebook itself has warned, the time spent on its pages from
those sitting in front of personal computers is declining rapidly
because we are switching our screen time to smartphones and
tablets.

While smartphone minutes have doubled in a year to 69 a month,
that growth is not guaranteed to compensate for dwindling desktop
usage.

Facebook is the most authoritative source on its own user
numbers, and the firm will update investors on its performance
for the March quarter on Wednesday. Wall Street expects revenues
of about $1.44bn, up from $1.06bn a year ago.

Shareholders will be particularly keen to learn how fast
Facebook's mobile user base is growing, and whether advertising
revenues are increasing at the same rate.

Mobile represented nearly a quarter of Facebook's advertising
income at the end of 2012, and the network had 680m mobile users
a month in December.

According to Pivotal Research Group, advertising revenue could be
up 49%, driven by international expansion and the FBX advertising
exchange, which uses Facebook to target advertising related to
other websites surfers have visited.

The company warned in recent stockmarket filings that it might be
losing "younger users" to "other products and services similar
to, or as a substitute for, Facebook".

Wary of competition from services that were invented for the
mobile phone rather than the PC, founder Mark
Zuckerberg has driven through a series of new initiatives in
the last year designed to appeal to smartphone users. The most
significant is Facebook Home, software that can be downloaded on
to certain Android phones to feed news and photos from friends –
and advertising – directly to the owner's locked home screen.